Thousands of Pennsylvania Foreclosures Could Be on Shaky Ground

Two Pennsylvania cases, one state and one federal, have exposed new types of document problems in foreclosure cases. One of the cases has potentially transformative consequences for thousands of troubled Pennsylvania homeowners. At the center of each is the same law firm: Goldbeck McCafferty & McKeever (GMM).

A lawsuit filed by Patrick Loughren against GMM details how the firm allowed — and perhaps still allows — nonlawyers in its firm to file and prosecute thousands of foreclosures.

If Loughren does win, the consequences could be far-reaching: All current foreclosure actions filed by GMM could be dismissed on the grounds that lawsuits filed by nonlawyers are a “nullity,” meaning they don’t count. That’s hundreds, potentially thousands, of cases across Pennsylvania. …

Loughren notes that in both cases involving the partners’ testimony about the practice, Bank of America (BAC) was the foreclosing bank. It was actually present during the December 2009 trial when the admissions were first made. Loughren points out that BofA’s representative at that trial, John Smith, is himself a lawyer, and so presumably understood the legal significance of GMM’s admission. …

By bringing his suit in this form, however, Loughren has a difficult challenge to prove he has the right — or “standing” — to sue GMM. So GMM may escape the suit without a judge ruling on its merits. That won’t actually help the firm too much, though, because the suit provides a template for any attorney representing a homeowner being foreclosed on by a GMM client. And since this could include hundreds or thousands of people, surely someone else will take a similar approach if Loughren is found to lack standing.